How Rolling Hills landfill became a money pit
- April 6, 2015
- / William Rabb
- / community-dashboard
Opponents of the troubled Rolling Hills Construction and Demolition landfill last month won a hard-fought victory when a judge ordered the facility's permit revoked.
After years of complaints by nearby residents and months of legal action by regulators, the real battle may have just begun.
The victims this time may be Escambia County taxpayers. They could face millions of dollars in expenses and years of legal wrangling over the landfill that has been cited repeatedly for noxious gas, dust and water violations.
Unlike similar facilities around the state, Rolling Hills has been allowed by state regulators to carry a relatively small amount of financial assurance – similar to a bond – to cover the cost of closing down the landfill, state records show.
The assurance is like an insurance policy. It is required precisely so that if the facility owners don't clean up the mess, the state can use it to cover the costs, state officials said.
But experts now say that the Rolling Hills financial assurance amount probably won't be nearly enough to reduce the height of a debris pile, properly seal the site, limit pollution and ward off fires that are prone to erupt in landfills.
Costly closure
In 2012, the Florida Department of Environmental Protection approved a $651,600 closure-cost estimate for Rolling Hills, meaning the facility has a line of credit to pay that much toward sealing it up, DEP records show. (Rolling Hills also carries a $202,300 assurance plan to cover maintenance of the site for five years.)
The plan is not out of line with many construction and demolition landfills around the state, but well below the $25,000-per-acre that some top engineers recommend.
“Yeah, that looks pretty low. It probably wouldn't cover half the cost of just bringing in dirt to cover it over,” said Jim Golden of Orlando, whose firm, HSA Golden Engineering and Environmental Solutions, has certified dozens of landfill cost estimates around Florida.
Months behind on mortgages, with lawsuits piling up and one partner in bankruptcy, Rolling Hills operators say that without a license to operate and no income from accepting waste, they wouldn't have the money to properly close down the site, grade the debris and cover it with dirt and sod.
“At that point, we'll have no choice but to say, 'Here are the keys, guys. Good luck,' ” said Scott Miller, managing partner with South Palafox Properties LLC, owner of the 160-acre facility in northwest Pensacola.
South Palafox has filed a 38-point objection to the administrative judge's ruling, and Miller said the company will seek further legal appeals if necessary. But local and state authorities don't expect those to succeed, and a final state order shutting down the facility could come as early as the end of May.
[caption id="attachment_16153" align="alignleft" width="300"]
The group got a look at the growing pile of dirt and debris at the Rolling Hills landfill next to the Marie Young-Wedgewood Community Center.[/caption]
Escambia County officials, despite playing a heavy role in actions that may lead to the closure, acknowledged that they aren't exactly sure what will happen when Rolling Hills shuts down.
“We just don't know yet,” County Administrator Jack Brown said. “I mean, we don't know what Rolling Hills will do in that case. We don't know what the (creditor) financial institutions will do.”
Brown said that county officials have come up with some rough estimates on what it might take to properly close and maintain Rolling Hills, situated just west of U.S. 29, but he declined to share those, saying that state authorities are the ones to handle the closure.
Who pays the bill?
That may be the case, but if recent history is any indicator, county taxpayers may be the ones footing the bill if authorities decide to button up the landfill to a level that is considered environmentally safest.
Escambia County did just that with the Saufley Construction and Demolition facility in west Pensacola in 2010. Abandoned by its owners and smoldering for months, the facility was closed down and taken over by county officials.
In a move that did not receive much scrutiny at the time, Escambia County also went above state requirements and spent an extra $700,000 to build an impermeable synthetic cap over the landfill, state records show.
County commissioners were concerned that improper waste accepted into Saufley over the years could have posed long-term health and pollution hazards to the surrounding community, and they opted for the more expensive cap system, said Pat Johnson, the county’s solid waste manager.
Saufley's closure bond was just $344,800, but Escambia County ended up spending more than $6 million on closing the facility, which was about half the size of the active Rolling Hills area.
It's unclear if the county will go for a similar, top-shelf closure plan for Rolling Hills. The difference, Brown said, is that while Saufley had run amok and was abandoned, “Rolling Hills is still an active business. You do have somebody that is responsible.”
Nonetheless, Brown acknowledged that DEP officials may now be concerned that they allowed Rolling Hills to post such a low amount of financial assurance.
“I would think they're probably looking at it right now, saying, 'Do we have enough money to do this or not?' ” Brown said.
DEP officials said only that each disposal facility is different and closure-cost estimates are based on many factors.
Estimates must be certified every five years by an engineer working for a third party. Rolling Hills last submitted a certified plan in 2012.
Some construction and demolition facilities around the state hold much larger amounts of financial assurance, records show.
Two in Jacksonville, for example, acquired bonds in the millions of dollars, according to information from the DEP. One of those, Jones Road C&D Disposal Facility, is 20 percent smaller than the Rolling Hills portion, and it accepts the same type of waste, but holds a $4.3 million closure bond. Another site, about twice as large as Rolling Hills, holds financial assurance 10 times as large.
“The state lets the owners use a formula,” Brown said. “Maybe it works in some cases better than others.”
Things weren't supposed to work out this way for Rolling Hills, its owners and county officials agree.
Perfect storm
Rolling Hills started out decades ago as a relatively small borrow pit, where contractors would purchase sand and fill dirt for building projects. It was called a borrow pit because builders would "return" the material in the form of construction debris left over from building projects.
Many of the nearby homes in Wedgewood, adjacent to the site, were built in the 1960s with dirt from Rolling Hills, and much of the building waste material from those home now lies buried near the bottom of the site, Miller and longtime residents said. Several other pits in the Longleaf area also supplied dirt for roads and other construction.
Over the years, residential areas grew up around the pits, with Wedgewood to the east, Marcus Pointe golf course and homes to the south, and West Florida and Pine Forest high schools to the west.
By the mid-2000s, county leaders and business developers had new ideas for that part of Pensacola. Meetings were held about building a four-lane Longleaf-Pinestead connector road right through the Rolling Hills property, providing a much-needed thoroughfare all the way from Blue Angel Parkway to U.S. 29.
That's when Miller and others involved with South Palafox Properties saw dollar signs.
"The plan for that road was the reason we were interested in the site," Miller said.
Miller said his then-father-in-law came to him on the day of his wedding in 2007, saying the Rolling Hills owner at the time, who was sick with cancer, had approached him about buying the land. The plan was to seize the opportunity offered by the new road, and eventually turn the landfill into a sprawling industrial park.
The site also had other amenities perfect for an industrial park: a railroad line on one side, proximity to the Interstate highway, and a 48-inch sewer line running through the property.
“We looked at it like, shoot, we'll just buy this place and a storm will come next year or the following year, and we'll just cash in and run it on out.”
After making a profit accepting construction debris, South Palafox would be able to sell a graded strip of land to the county for the roadway for millions of dollars, then proceed to set up the industrial park, Miller said.
In other words, South Palafox business partners purchased a landfill but were never really in the landfill business. Two of the people involved in the venture also are officers in Open MRI Inc., a downtown Pensacola company specializing in magnetic resonance imaging for medical screenings.
“They weren't in the landfill business,” Brown said. “They were in the speculation business.”
For several years, Miller said, the debris pit operated smoothly, with few complaints from neighbors. Then, like a pile of trash that just keeps growing, troubles began to mount.
The road plan has been shelved, at least for the foreseeable future. In the last year, three events forced the county to rethink its priorities and redirect resources: The April 2014 flood caused millions of dollars in damage to county roads and buildings; the county jail exploded, forcing the county to consider spending millions more on a new site; and Navy Federal Credit Union announced it would anchor a new commerce park off Interstate 10 in Beulah. That has caused the county to focus on building infrastructure for the park and a planned I-10 interchange there.
The April flood also exacerbated the troubles at Rolling Hills. Suddenly, truck traffic exploded in nearby residential neighborhoods, along with dust and diesel fumes, as construction crews across the county got busy tearing out flood-damaged drywall and other building materials.
Rolling Hills was one of the few approved sites that could accept demolition debris, and it was significantly less expensive than the county-owned Perdido Landfill near Beulah.
Just a year earlier, another construction debris facility had caught fire, which also diverted more trash to Rolling Hills.
All that debris may have been good for business, but it also may have overwhelmed Rolling Hills' equipment and personnel, county officials said.
In a landfill, gypsum drywall, if left uncovered, can decay, releasing hydrogen sulfide gas, a rotten-egg smell that can trigger a number of health problems.
"It's very easy, if you're not watching on a routine basis, for things to get out of control real fast,” said Johnson, who oversees the county's landfill.
Air monitors set up by the county at Rolling Hills showed elevated levels of hydrogen sulfide, although Miller has disputed the data. Complaints from nearby residents, particularly those of the Wedgewood Community just northeast of Rolling Hills, grew louder. By 2014, state and county authorities had cited the facility for repeated violations.
The blame game
Meanwhile, South Palafox began to face mounting financial woes.
The company had obtained a $1.25 million loan from a Louisiana company known as Jamestown Gambling, also listed as Jamestown Gaming, but failed to make payments, and the creditor sued South Palafox in 2010 and again in 2014, Escambia County Circuit Court records show.
Miller said his company had obtained the loan from Jamestown because the owner, well-known Louisiana businessman Robert Maurin III of Hammond, was an old family friend.
Miller now blames county and state authorities in part for derailing the Longleaf Connector road plans, and for not giving his company credit for addressing problems at the landfill.
Miller said the previous, interim county administrator, Larry Newsom, strongly supported the Longleaf road plan. Brown, who took office last June, just a month after the flooding, has been less appreciative.
“I'm sorry he feels that way; I don't wish them any harm,” Brown said. “But the problem I have as county administrator is: 'I'm sorry you went out and bought a bunch of property and thought you were going to get rich off the county.' But it's not my responsibility to keep following with a plan when I've got bigger priorities.”
In their argument before the administrative judge late last year, South Palafox attorneys also blamed Rolling Hills' previous manager for not properly handling the waste. That manager, Charlie Davidson, was let go last summer. He declined to comment for this story, except to say that he is “a convenient mark” and scapegoat. “That place was nowhere near the shape it's in now when I was there,” he said.
Even now, Miller hopes the administrative judge will modify his revocation order, or that the DEP will reverse course, or that someone, somehow, will give him another chance. He frequently points to the final paragraph in the judge's March 2 ruling, which said revocation seemed “especially harsh” and “draconian,” yet required by law under the circumstances.
“It is draconian. Six months would bring us into compliance,” said Miller. “Right now, we've finally got everything. We've got all the equipment we need.”
The group got a look at the growing pile of dirt and debris at the Rolling Hills landfill next to the Marie Young-Wedgewood Community Center.[/caption]
Escambia County officials, despite playing a heavy role in actions that may lead to the closure, acknowledged that they aren't exactly sure what will happen when Rolling Hills shuts down.
“We just don't know yet,” County Administrator Jack Brown said. “I mean, we don't know what Rolling Hills will do in that case. We don't know what the (creditor) financial institutions will do.”
Brown said that county officials have come up with some rough estimates on what it might take to properly close and maintain Rolling Hills, situated just west of U.S. 29, but he declined to share those, saying that state authorities are the ones to handle the closure.
Who pays the bill?
That may be the case, but if recent history is any indicator, county taxpayers may be the ones footing the bill if authorities decide to button up the landfill to a level that is considered environmentally safest.
Escambia County did just that with the Saufley Construction and Demolition facility in west Pensacola in 2010. Abandoned by its owners and smoldering for months, the facility was closed down and taken over by county officials.
In a move that did not receive much scrutiny at the time, Escambia County also went above state requirements and spent an extra $700,000 to build an impermeable synthetic cap over the landfill, state records show.
County commissioners were concerned that improper waste accepted into Saufley over the years could have posed long-term health and pollution hazards to the surrounding community, and they opted for the more expensive cap system, said Pat Johnson, the county’s solid waste manager.
Saufley's closure bond was just $344,800, but Escambia County ended up spending more than $6 million on closing the facility, which was about half the size of the active Rolling Hills area.
It's unclear if the county will go for a similar, top-shelf closure plan for Rolling Hills. The difference, Brown said, is that while Saufley had run amok and was abandoned, “Rolling Hills is still an active business. You do have somebody that is responsible.”
Nonetheless, Brown acknowledged that DEP officials may now be concerned that they allowed Rolling Hills to post such a low amount of financial assurance.
“I would think they're probably looking at it right now, saying, 'Do we have enough money to do this or not?' ” Brown said.
DEP officials said only that each disposal facility is different and closure-cost estimates are based on many factors.
Estimates must be certified every five years by an engineer working for a third party. Rolling Hills last submitted a certified plan in 2012.
Some construction and demolition facilities around the state hold much larger amounts of financial assurance, records show.
Two in Jacksonville, for example, acquired bonds in the millions of dollars, according to information from the DEP. One of those, Jones Road C&D Disposal Facility, is 20 percent smaller than the Rolling Hills portion, and it accepts the same type of waste, but holds a $4.3 million closure bond. Another site, about twice as large as Rolling Hills, holds financial assurance 10 times as large.
“The state lets the owners use a formula,” Brown said. “Maybe it works in some cases better than others.”
Things weren't supposed to work out this way for Rolling Hills, its owners and county officials agree.
Perfect storm
Rolling Hills started out decades ago as a relatively small borrow pit, where contractors would purchase sand and fill dirt for building projects. It was called a borrow pit because builders would "return" the material in the form of construction debris left over from building projects.
Many of the nearby homes in Wedgewood, adjacent to the site, were built in the 1960s with dirt from Rolling Hills, and much of the building waste material from those home now lies buried near the bottom of the site, Miller and longtime residents said. Several other pits in the Longleaf area also supplied dirt for roads and other construction.
Over the years, residential areas grew up around the pits, with Wedgewood to the east, Marcus Pointe golf course and homes to the south, and West Florida and Pine Forest high schools to the west.
By the mid-2000s, county leaders and business developers had new ideas for that part of Pensacola. Meetings were held about building a four-lane Longleaf-Pinestead connector road right through the Rolling Hills property, providing a much-needed thoroughfare all the way from Blue Angel Parkway to U.S. 29.
That's when Miller and others involved with South Palafox Properties saw dollar signs.
"The plan for that road was the reason we were interested in the site," Miller said.
Miller said his then-father-in-law came to him on the day of his wedding in 2007, saying the Rolling Hills owner at the time, who was sick with cancer, had approached him about buying the land. The plan was to seize the opportunity offered by the new road, and eventually turn the landfill into a sprawling industrial park.
The site also had other amenities perfect for an industrial park: a railroad line on one side, proximity to the Interstate highway, and a 48-inch sewer line running through the property.
“We looked at it like, shoot, we'll just buy this place and a storm will come next year or the following year, and we'll just cash in and run it on out.”
After making a profit accepting construction debris, South Palafox would be able to sell a graded strip of land to the county for the roadway for millions of dollars, then proceed to set up the industrial park, Miller said.
In other words, South Palafox business partners purchased a landfill but were never really in the landfill business. Two of the people involved in the venture also are officers in Open MRI Inc., a downtown Pensacola company specializing in magnetic resonance imaging for medical screenings.
“They weren't in the landfill business,” Brown said. “They were in the speculation business.”
For several years, Miller said, the debris pit operated smoothly, with few complaints from neighbors. Then, like a pile of trash that just keeps growing, troubles began to mount.
The road plan has been shelved, at least for the foreseeable future. In the last year, three events forced the county to rethink its priorities and redirect resources: The April 2014 flood caused millions of dollars in damage to county roads and buildings; the county jail exploded, forcing the county to consider spending millions more on a new site; and Navy Federal Credit Union announced it would anchor a new commerce park off Interstate 10 in Beulah. That has caused the county to focus on building infrastructure for the park and a planned I-10 interchange there.
The April flood also exacerbated the troubles at Rolling Hills. Suddenly, truck traffic exploded in nearby residential neighborhoods, along with dust and diesel fumes, as construction crews across the county got busy tearing out flood-damaged drywall and other building materials.
Rolling Hills was one of the few approved sites that could accept demolition debris, and it was significantly less expensive than the county-owned Perdido Landfill near Beulah.
Just a year earlier, another construction debris facility had caught fire, which also diverted more trash to Rolling Hills.
All that debris may have been good for business, but it also may have overwhelmed Rolling Hills' equipment and personnel, county officials said.
In a landfill, gypsum drywall, if left uncovered, can decay, releasing hydrogen sulfide gas, a rotten-egg smell that can trigger a number of health problems.
"It's very easy, if you're not watching on a routine basis, for things to get out of control real fast,” said Johnson, who oversees the county's landfill.
Air monitors set up by the county at Rolling Hills showed elevated levels of hydrogen sulfide, although Miller has disputed the data. Complaints from nearby residents, particularly those of the Wedgewood Community just northeast of Rolling Hills, grew louder. By 2014, state and county authorities had cited the facility for repeated violations.
The blame game
Meanwhile, South Palafox began to face mounting financial woes.
The company had obtained a $1.25 million loan from a Louisiana company known as Jamestown Gambling, also listed as Jamestown Gaming, but failed to make payments, and the creditor sued South Palafox in 2010 and again in 2014, Escambia County Circuit Court records show.
Miller said his company had obtained the loan from Jamestown because the owner, well-known Louisiana businessman Robert Maurin III of Hammond, was an old family friend.
Miller now blames county and state authorities in part for derailing the Longleaf Connector road plans, and for not giving his company credit for addressing problems at the landfill.
Miller said the previous, interim county administrator, Larry Newsom, strongly supported the Longleaf road plan. Brown, who took office last June, just a month after the flooding, has been less appreciative.
“I'm sorry he feels that way; I don't wish them any harm,” Brown said. “But the problem I have as county administrator is: 'I'm sorry you went out and bought a bunch of property and thought you were going to get rich off the county.' But it's not my responsibility to keep following with a plan when I've got bigger priorities.”
In their argument before the administrative judge late last year, South Palafox attorneys also blamed Rolling Hills' previous manager for not properly handling the waste. That manager, Charlie Davidson, was let go last summer. He declined to comment for this story, except to say that he is “a convenient mark” and scapegoat. “That place was nowhere near the shape it's in now when I was there,” he said.
Even now, Miller hopes the administrative judge will modify his revocation order, or that the DEP will reverse course, or that someone, somehow, will give him another chance. He frequently points to the final paragraph in the judge's March 2 ruling, which said revocation seemed “especially harsh” and “draconian,” yet required by law under the circumstances.
“It is draconian. Six months would bring us into compliance,” said Miller. “Right now, we've finally got everything. We've got all the equipment we need.”
Editor's note April 7: This article originally incorrectly stated the number of acres at the Rolling Hills Construction and Demolition Debris Facility that are covered by a financial assurance plan. The assurance, similar to a bond or insurance policy, is required by state regulators and would pay the cost of closing and maintaining the site for five years. The active area at Rolling Hills is actually 17 acres, giving the facility a per-acre coverage amount of $50,232. That is higher than some engineers recommend, but still much lower than some similar facilities in the state, and much lower than what authorities spent to close and seal the Saufley Construction and Demolition facility in Pensacola in 2011. PensacolaToday regrets the error.
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